May 11, 2015 | Issue Brief on Trade
Advocates of free trade agreements often assert that trade is beneficial because it gives American businesses better access to the world’s consumers, 95 percent of whom live outside the United States. While this claim is a fact, the argument centers on the regrettable fixation over the benefits of exports. This mercantilist view often discounts or even completely ignores the value and significance of the dynamic contribution that imports have for the U.S. economy.
The emphasis on exports, an ideological relic of past centuries, has been deeply embedded in U.S. trade policy. Ongoing trade-related programs, such as the National Export Initiative and the Export–Import Bank, favor one-sided, export-driven international trade and rarely ever mention how vital imports are to Americans and the U.S. economy. Meanwhile, leaders in Congress and the executive branch constantly harp on the advantages of exports when selling new trade initiatives to the public. As Congress tries to push forward its long-delayed trade agenda, it must recognize that the value of imports is an indispensable component of U.S. trade policy.
Imports are often misunderstood as being detrimental to economic growth and employment. But in practice, they provide invaluable benefits to American workers, consumers, and producers. As demonstrated in numerous empirical studies, the following benefits from imports that accrue to the American economy are real and undeniable:
According the HSBC bank, when distributed equally, that gain translates into an additional $13,600 in income per American household compared to an environment with no international trade. This additional income, and economic growth, is essential for building and maintaining a strong middle class that can afford modern amenities.
What we send abroad we can’t eat, we can’t wear, we can’t use for our houses. The goods and services we send abroad, are goods and services not available to us. On the other hand, the goods and services we import, they provide us with TV sets we can watch, automobiles we can drive, with all sorts of nice things for us to use.
A growing number of economists and advocates of free trade have established that imports provide choices and opportunities that increase individual and national prosperity. These benefits do not come at the expense of economic dynamism. Instead, expanded economic activity due to trade in both directions creates jobs. Congress can best bolster the U.S. economy—and increase employment—by moving away from protectionism and toward freer trade that takes full advantage of the benefits of imports.—Ryan Olson is Research Associate in Economic Freedom in the Center for Trade and Economics, of the Institute for Economic Freedom and Opportunity, at The Heritage Foundation. Anthony B. Kim is Research Manager of the Index of Economic Freedom and Senior Policy Analyst for Economic Freedom in the Center for Trade and Economics.
 Derek Scissors, Charlotte Espinoza, and Terry Miller, “Trade Freedom: How Imports Support U.S. Jobs,” Heritage Foundation Backgrounder No. 2725, September 12, 2012, http://www.heritage.org/research/reports/2012/09/trade-freedom-how-imports-support-us-jobs.
 Lucy P. Eldridge and Michael J. Harper, “Effects of Imported Intermediate Inputs on Productivity,” Monthly Labor Review (June 2010), http://www.bls.gov/opub/mlr/2010/06/art1full.pdf (accessed May 8, 2015).
 Kevin L. Kliesen and John A. Tatom, “U.S. Manufacturing and the Importance of International Trade: It’s Not What You Think,” Federal Reserve Bank of St. Louis Review (January/February 2013), http://research.stlouisfed.org/publications/review/13/01/Kliesen.pdf (accessed May 8, 2015).
 The White House, “The Economic Benefits of U.S. Trade,” May 2015, https://www.whitehouse.gov/sites/default/files/docs/cea_trade_report_final_non-embargoed_v2.pdf (accessed May 8, 2015).
 Matthew J. Slaughter, “How America Is Made for Trade,” HSBC, 2014, http://images.cmbinsight.hsbc.com/Web/HsbcUsaInc/%7B8e7c7a72-1fec-484c-9785-268ab6234358%7D_MFT_DC_Report_Digital_Final.pdf (accessed May 8, 2015).
 Milton Friedman, “Free Trade: Producer Versus Consumer,” Landon Lecture, April 27, 1978, http://ome.ksu.edu/lectures/landon/trans/Friedman78.html (accessed May 8, 2015).